TORRANCE, Calif. – November 13, 2015 – Keenan, the largest privately held insurance brokerage and consulting firm in California, partnered with the City of Glendale, Calif., to redesign the City’s retiree health care benefits. The changes were made to address the current unfunded Other Post-Employment Benefits (OPEB) liability of $250 million and anticipated changes under the new reporting provisions from the Governmental Accounting Standards Board (GASB) Statements 74 & 75.
“Public agencies everywhere are now challenged to manage their current OPEB obligations and as new GASB provisions will require greater transparency of these liabilities which many cases are unfunded,” said Steve Gedestad, Municipality Practice Leader for Keenan. “It is critical that these entities address these requirements now with innovative tools and resources to deal with these significant liabilities while offering additional affordable options for their retirees.”
Keenan has been the City’s employee benefits consultant since 2009. On Oct. 6, 2015, the City of Glendale approved a change in the options available to retirees and how much they pay for those benefits. Additional options were made available through FuturisCare and Keenan Direct exchange programs. The changes are projected to reduce the City’s OPEB liability in excess of $200 million. The City was extremely transparent about the new benefits approach and how it would impact retiree medical, emphasizing the help the program would give the retirees through the transition to new plans. Because of the open and proactive communication to the retiree population, the City Council gave their unanimous approval to the arrangement.
“Choosing to tackle this large unfunded liability was not easy, but it is our responsibility to the taxpayers to be fiscally responsible,” said Glendale Mayor Ara Najarian.
“Through a series of meetings with our employees, we received very constructive input, ideas and challenges in approaching this complex and sensitive issue from a number of different perspectives,” said Glendale City Manager Scott Ochoa. “We are very pleased that many have found options and services that will meet their ongoing medical insurance needs through the new Keenan programs.”
Futuris Care offers a Medicare exchange for retirees, while the KeenanDirect exchange will be available to serve early retirees. Both resources offer concierge and navigation, individual counseling, and plan evaluations and comparisons. Futuris Care also provides a range of retiree benefit program management services including establishment of a benefit trust to fund OPEB liabilities.
Under the new GASB 74 & 75 provisions, government entities are required to recognize and report all unfunded OPEB liabilities as an expense on the financial statements. Previous accounting standards allowed for a 30-year amortization and were only included as part of the financial statement notes. These changes may have an impact an agencies credit rating. Reported OPEBs can include post-retirement medical, pharmacy, dental, vision and other welfare benefits not associated with a pension plan.
For information on Keenan insurance brokerage and consulting programs, visit www.keenan.com.
Founded in 1972, Keenan is a top 25 insurance consulting and brokerage firm in the U.S., and the largest independent broker in California. Keenan is dedicated to providing superior insurance products and services to schools, community colleges, healthcare organizations and municipalities for employee benefits, health benefit management services, workers’ compensation, risk management, and property and liability. With headquarters in Torrance, CA, Keenan has a staff of more than 675 insurance specialists and branch offices in Riverside, San Clemente, Oakland, San Jose, Rancho Cordova, Redwood City, Pleasanton and Eureka. For more information, call 800-654-8102 or 310-212-3344, email email@example.com or visit www.keenan.com.